With fuel prices expected to rise due to the war in Iran, Aussie motorists driving less in 2026 could save hundreds by updating one key detail on their car insurance policy, according to new research from Compare the Market.

With nearly four-in-10 drivers surveyed* spending less time on the road now than they did 12 months ago, the comparison experts are warning many may be missing out on potential savings by paying for more mileage than they need.

The research showed motorists may be forking out more than necessary if their annual kilometre limit hasn’t been updated to reflect changing driving habits.

Quoted comprehensive car insurance premiums on a 10,000km limit policy were $280 (14%) lower on average than a 15,000km limit policy from a range of policies for the example driver profile*.

If the policy driving limit is set at 5,000km, the quoted difference widened to $434 (21%) on average compared to a 15,000km limit policy for the same example driver profile.

Source: Compare the Market

*Decreased avg premium attributed to more policies available with 15,000km limit compared to 20,000km limit. Average Quoted Premium quoted at 6/1/26 based on a range of comprehensive insurance policies for 2026 Toyota RAV4 GX Hybrid FWD, $900 excess, 35 yr old male, QLD 4051 with no claims history, vehicle modifications or policy age restriction. All policies available were quoted then averaged.

Compare the Market’s Chris Ford said it’s important for Australian motorists to regularly review their car insurance policy details to ensure they’re up to date.

“You wouldn’t spend more on a large meal that you won’t eat. The same logic applies when it comes to car insurance,” Mr Ford said.

“It’s easy to set and forget your car insurance, but if you aren’t driving your car as much as you were when you first took out the policy, you may be able to reduce your insurance bill significantly by switching to a policy with a lower kilometre limit.

“Whether you’re taking public transport, cycling or walking more, have moved closer to work or you’re working remotely, the typical 15,000km driving limit on your policy may no longer be applicable.

“If your renewal is due soon, consider reviewing your policy details and shopping around for a better deal with other insurers.

“Those who drive less each year have a reduced risk of being involved in an accident. As a result, many insurers offer lower premiums when the vehicle’s usage is low, with some specifically offering low-kilometre or ‘Pay As You Drive’ policy options.”

But Mr Ford warned it was important to be honest with insurers, too.

“This option isn’t for everyone. If you drive a lot and go over your insurer’s limit, you could run into problems,” Mr Ford said.

“Honesty is always the best policy. Your premium may cost more, but it could prevent the insurer rejecting your claim down the line or requiring you to pay an additional excess if it is found that you have driven more than the set limit.”

When referencing this research, please attribute: https://www.comparethemarket.com.au/car-insurance/pay-as-you-drive/

Disclaimers

Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to check for the inclusions, exclusions and restrictions before purchasing and determine if the policy is suitable for you.

*Compare the Market commissioned PureProfile to survey a nationally representative sample of 1,010 Australians in December 2025.

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For more information, please contact:

Henry Man | [email protected] | +61 474 368 908

About comparethemarket.com.au

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.